Liberalization In China Research Articles

Esperanto as language and idea in China and Japan

For the past hundred years Esperanto has found adepts in China and Japan. Outside Europe and the Americas, nowhere has Esperanto spread as much as it has in East Asia. The Chinese and Japanese were drawn to it through their desire to learn from the west; they hoped to use Esperanto as a bridge between east and west or they found in it a link to anarchism and communism. Often the Esperantists used their language for campaign purposes, for example in the battle against the Japanese invasion of China beginning in the 1930s (“For the liberation of China through Esperanto”) or for the popularization of pacifism in postwar Japan. As in the west, many Esperantists in China and Japan based their connection with Esperanto on the idea of the harmony of all humankind. The movement progressed thanks primarily to those who avoided too much missionary zeal and preferred to recruit on the basis of Esperanto as a neutral device. Given the lack of opportunity to use the language in practical ways, for more than half of the past hundred years the Esperantists of East Asia tended to emphasize Esperanto as an idea; but the economic prosperity of Japan and the opening of China, by allowing greater contact with the outside world, have given Esperanto the opportunity to demonstrate more strongly its usefulness as an easily learned means of communication, also for direct contact between Chinese and Japanese.

The Zheng Communities and the Formation of a Transnational Lineage

AbstractTransnational business networks and entrepreneurship should not be regarded as the only major theme of Chinese contemporary transnationalism. The transnationalization of traditional social and cultural institutions and the social practices engaged in by agencies facilitated by the networks deserve our attention as well. By narrating the case of a transnational lineage, this article describes how the lineage was constructed historically in a broader structure of relations across borders, how the major concern of the lineage has been revived since the liberalization in China, and how these social and cultural practices are revealing a dynamic process of identity-making of people who are involved in the transnational space.

Market liberalization and firm performance during China's economic transition

This paper examines the impact of market liberalization on firm performance through institutional changes during the economic reform in China. The conceptualization focuses on the decentralization of control, ownership restructuring, and industrial policy as the primary institutional changes to implement market liberalization in China. These institutional changes affect firm performance by shaping managerial incentives, affecting transaction and agency costs, and making selective resource allocations across and within industries. Using a large-scale data set including 23,577 firms between 1992 and 1996, the study examines how market liberalization affects the profitability and productivity of Chinese firms and the relationship between ownership change and the performance of state-owned enterprises.

State Building, Capitalist Development, and Social Justice

This article explores social democracy in China as an intellectual current and political movement, seeking to demonstrate, on one hand, its similaritiesto European classical social democracy and, on the other, its Chinese peculiarities. It revises the earlier historiography that viewed liberalism in China as irrelevant to the crisis of Chinese society at the time. Instead, it argues that social democracy, linked to state building, capitalist development, and social justice, was a dominant feature of Chinese liberalism and politics, which provided an impetus to China’s modern transformation. Many intellectuals, such as Hu Shi, Zhang Junmai, and Zhang Dongsun, were simultaneously liberal, democratic, and socialist. Their frustrations in the end had much to do with the dominant mainstream political culture, represented by the GMD and the CCP, and little to do with the liberal, democratic, or socialist creed itself.

Currency convertibility, cost of capital control and capital account liberalization in China

This paper provides a synthetic view of the capital account liberalization, capital control and currency convertibility issues in China. A quantitative analysis following Henry’s study1 fails to provide clear links between liberalization, diminishing capital controls and Chinese stock market returns. An institutional explanation is then offered to complement the quantitative analysis. We suggest that the property rights regime is an indispensable institutional variable when studying this topic. Originating from the current property rights regime; price distortion, moral hazard and monetary overhang are the main impediments towards capital account liberalization and full convertibility. Therefore, property rights reform should be given the first priority in Chinese economic reform.

“Measuring Poverty”: Discussion

Angus Deaton points out the tremendous disparities between what has been happening to incomes of the world’s poor under national accounts measures and what has been happening according to household survey data. National accounts data suggest tremendous improvement in living standards of the poor, whereas survey data suggest much more modest improvement, at least over certain short periods. The discrepancy between the two sources of data underlies much of the dispute over trends in poverty between Sala-i-Martin (2002) and Bhalla (2002) on the one hand, and official World Bank estimators such as Chen and Ravallion (2001) on the other. In this very nice paper, Angus Deaton ably lays out the discrepancy between the two sources of data and elucidates a number of potential reasons for this discrepancy. I’ll just make a few additional points. First, in my view it’s not clear that trends in income for the world’s poor shed much light on the dispute over globalization or on the impact of growth on poverty, because many other factors— from technological change to global warming to AIDS—are affecting the incomes of the world’s poor. Second, it seems possible that liberalization in China and in India has had an important effect on the way national accounts are collected. For example, under licensing, firms in India may have been reluctant to admit the size of their capital stocks, or the size of their workforce. If they are now more willing to report these things, growth will be overestimated. Deaton focuses on India, where the data for all their faults are presumably better than in Africa. It is worth noting that in many small, poor countries, GDP is often calculated on the basis of a few hard numbers from an ancient input-output table. Angus notes that as the structure of the economy changes, these numbers may become further and further from reality. It is possible that official data overstate the fall in GDP in some African states. For example, in some states exports are very heavily taxed, and people may have responded by relying on more domestic production or informal production. They also may simply have switched to informal-sector activities. If these are missed, then GDP declines will be exaggerated. A number of factors that improve welfare do not show up in household surveys. Education services, for example, are provided by the state and are not likely to show up in household surveys as consumption of the poor (they will, of course, show up in overall national income). As shown in figure 1, there has been a tremendous increase in access to education for the poor in India. Another issue to consider is technological progress and unmeasured quality improvements. This is very important in calculating changes in U.S. income. One might think that because the poor consume a lot of food, their consumption is less subject to quality improvement than that of richcountry consumers. However, the poor have benefited considerably from medical progress. Until recently there have been strong positive trends in life expectancy (see figure 2) and infant mortality (see figure 3) in China, India, and Africa. More recently there has been some breakdown in education and health systems in poor areas of China, and the advent of AIDS has caused a tremendous worsening of health conditions in Africa. As shown in table 1, access to water has also been improving. Another factor that has made people in poor countries better off in ways that are not picked up in household surveys or GDP accounts is the growth of entertainment options, in particular the expansion of choice in radio and television (TV) programming. This may not matter much for the very poorest in India and China, but it has made a wide swathe of the population better off. The growth of political freedom in China and Africa in recent decades also undoubtedly provides a huge gain in welfare. Figures on radio and TV ownership are reproduced in figures 4 and 5. They suggest huge improvements that go well beyond any small elite, even if they do not necessarily reach the very poorest.

Putting the Cart Before the Horse? Capital Account Liberalization and Exchange Rate Flexibility in China

This paper reviews the issues involved in moving towards greater exchange rate flexibility and capital account liberalization in China. A more flexible exchange rate regime would allow China to operate a more independent monetary policy, providing a useful buffer against domestic and external shocks. At the same time, weaknesses in China's financial system suggest that capital account liberalization poses significant risks and should be a lower priority in the short term. This paper concludes that greater exchange rate flexibility is in China's own interest and that, along with a more stable and robust financial system, it should be regarded as a prerequisite for undertaking a substantial liberalization of the capital account.

The sequencing of reform policies in China's agricultural transition*

AbstractThis paper provides evidence regarding gains due to agricultural market liberalization in China. We empirically identify the different effects that incentive and farm restructuring reforms and gradual market liberalization have on China's agricultural economy during its transition period. We find that average gains within the agricultural sector due to reforms that improved incentives and increased decision‐making authority of producers exceed gains due to market liberalization by a large margin. Our method of analyzing the effects of transition policies on economic performance can be generalized to other reform paths in other transition economies.

CHINA, GMOS AND WORLD TRADE IN AGRICULTURAL AND TEXTILE PRODUCTS

Abstract. China's rapid industrialization and recent accession to the WTO makes it difficult for the country to maintain self‐sufficiency in agricultural products. Genetic modification technology could ease the situation, but is not without controversy. This paper focuses on the implication of GMO controversy for China. It explores the potential economic effects of China's not adopting versus adopting GMOs when some of its trading partners adopt that technology. The effects are shown to depend to a considerable extent on the trade policy stance taken in high‐income countries that are opposed to GMOs, and/or on the liberalization of China's trade in textiles and apparel.

Sequencing and the Success of Gradualism: Empirical Evidence from China's Agricultural Reform

This paper provides evidence regarding gains to agricultural market liberalization in China. We empirically identify the different effects that incentive reforms and gradual market liberalization have on China's agricultural economy during its transition period. We find that average gains within the agricultural sector to incentive reform exceed gains to market liberalization by a factor of ten. Our method of analyzing the effects of transition policies on economic performance can be generalized to other reform paths in other transition economies.

Trade and environment: evidence from China's manufacturing sector

AbstractThis paper focusing on the Chinese manufacturing sector assesses the environmental impact of trade liberalization in China. The results show that China's experience with the trade liberalization–environment nexus is consistent with international evidence. On one hand, trade liberalization has had various positive effects on the environment. Firstly, it promoted specialization in areas of comparative advantage, which, in general, included industries that contributed less to environmental degradation. Secondly, it allowed China to access and adopt the best international practices in pollution abatement technology. Thirdly, it enabled China to transfer environmental costs to other countries by importing intermediate products whose production contributed to environmental degradation. On the other hand, these positive effects were overwhelmed by a negative scale effect, which was the result of a huge increase in the demand for Chinese exports. The paper concludes that if China is to prevent pollution from reaching a critical threshold, environmental regulations need to be tightened. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment.

Social networks and electronic commerce in China*

Communications technologies that make up the emerging global information infrastructure have the power to regulate online behavior. Social networks in Chinese society have survived the growth of formal legal institutions and liberalization of China's economy, but it is not clear whether they can survive the regulatory pressures created by global information technology networks. The spread of electronic commerce technologies in China may strengthen legal institutions and open local markets to international competition, but is likely to be resisted by all the same interests that resist those changes in other contexts. The Chinese response to the spread of electronic commerce might take several forms: assimilation; marginalization; or localization of new forms of commercial activity that rely on new technologies.

Trade Liberalization in China's Accession to WTO

China’s forthcoming accession to the WTO involves reforms across a wide range of sectors in China, both in directly trade-related sectors and behind the border. The implications of these reforms are greatly influenced by the starting point—a partially reformed economy with relatively high import duties, but in which export sectors benefit from liberal duty exemptions on their inputs. The paper takes account of this special feature in assessing the implications of reform. We find that China and its major trading partners gain from accession, while some competing countries suffer smaller losses. The adjustments required are greatly reduced by the dramatic liberalization that China undertook in the 1990s.

FINANCIAL LIBERALIZATION IN CHINA - Limitations and lessons of the Japanese regime

China has reformed old socialist banking institutions, using the Japanese financial regime as a model. We explain why this regime can perform well in the short run but will ultimately lead to serious economic problems, as exemplified by the recent Asian financial crisis, and we explain the problems and consequences of financial liberalization. We conclude with a summary of lessons China's reformers should learn from the recent financial experiences of their Asian neighbors.

FINANCIAL LIBERALIZATION IN CHINA - Limitations and lessons of the Japanese regime

China has reformed old socialist banking institutions, using the Japanese financial regime as a model. We explain why this regime can perform well in the short run but will ultimately lead to serious economic problems, as exemplified by the recent Asian financial crisis, and we explain the problems and consequences of financial liberalization. We conclude with a summary of lessons China's reformers should learn from the recent financial experiences of their Asian neighbors.

Competing Perspectives on the Liberalization of China’s Foreign Trade and Investment Regime

China has been experiencing a social and economic transformation that is no less dramatic than those experienced since 1989 by the nations of central and eastern Europe. In a span of twenty years, this once sleeping giant has evolved from a centrally planned, autarkic, socialist economy to a rapidly growing, decentralized, open, market-driven economy. What makes this transformation especially remarkable is the fact that it was initiated, guided, and encouraged by the Chinese Communist Party (CCP) itself. China's transformation, which began in 1978, has enormous consequences for the global economy because of the strategic position that an awakening China occupies in Asia and, indeed, in the world. The effect China's economy is bound to have on the allocation of the world's resources will be enormous, and so too will its effect on the well-being of the historically dominant western capitalist nations. It is therefore understandable that the Western nations, especially the United States, have been eager to integrate China into the world trading system by sponsoring China's membership in the World Trade Organization. The hope is that WTO membership will constrain if not neutralize an independent and possibly obstructionist China while at the same time prying open China's doors for global businesses. The Chinese, on the other hand, see membership in the global economic community as essential to their own continued economic growth and development and as an opportunity to influence to their own advantage the future of trade liberalization, although they hope the terms of such membership would preclude excessive foreign interference with their domestic economy.

Responsiveness, Flexibility, and Market Liberalization in China's Agriculture

been at most only limited gains from market liberalization. If one were to take the findings of this admittedly scant literature seriously, it would appear as if there is at most only a relatively small impact from market reforms in China. We believe there are three possible, but only one plausible, explanations for the findings. First, if market liberalization actually contributes little to no growth or increases in output or incomes, this would, of course, in part explain why economies that lead reform with market liberalization do not experience significant gains. Theory and the experiences of other economies in other settings, however, would argue against such an interpretation. Second, it could be that China's agricultural market liberalization has just proceeded so slowly that it is still too early for output to have been positively affected by market liberalization. However, as seen above, the record on the market expansion and the observations of many researchers would not support this view.

China’s Entrance to the WTO and Financial Reform

The openness and liberalization of China's financial market is expected to accelerate with her entrance to the WTO. China plans to carry out liberalization measures, including the expansion of the Renminbi business scope. Openness and liberalization will expedite the integration of internal and external sectors, thereby making the domestic financial market more vulnerable to environmental changes. Consequently, China should establish a strong financial system to efficiently cope with the contagion effects of an external financial crisis. However, China's financial system is still very weak, mainly due to the enormous bad loans to SOEs (state-owned enterprises). Accordingly, the Chinese government should carry out financial reform measures such as strengthening the financial supervision system, dealing with bad bank loans and restructuring the financial institutions. On the whole, China's entrance to the WTO is expected to have a positive influence on her financial sector by accelerating such reform policies as financial reform and SOE reform. Entrance to the WTO will make society recognize the necessity of reform and openness. The Chinese government can decide to push some difficult reform policies which would not have been considered without WTO entrance.

Classical Liberalism Catches On in China

The international press dubbed early 1998 as the “Beijing spring,” noting that Chinese intellectuals, “emboldened by signs of tolerance,” argued for political reform “more loudly than at any time since 1989.” Two different but closely associated voices were raised during those months: One called for political reform in China, while the other advocated classical liberalism as an alternative to established Marxist ideology. Although the latter voice received less attention from the outside world, it survived the former, which has been effectively silenced. This new school of thinkers, which calls itself ziyou pai (“the liberals”), made a formal appearance during the “Beijing spring” and declared that liberalism was making a comeback in China after an absence of almost 40 years. The formal reappearance of liberalism indicates that a new stage has been reached in the intellectual odyssey of Chinese intellectuals. A leading figure in the liberal revival asserted in the preface to Peking University and Liberalism in Modern China, “After the largest-scale totalitarian experiment ever undertaken in human history . . . liberalism has convincingly been proved to be the most desirable and universal system of values.” The resurgence of liberalism in China has not escaped the attention of the Western press. According to the New York Times, liberal political ideas and discussions are quietly making a comeback among Chinese Liu Junning, a former fellow at the Institute of Political Science of the Chinese Academy of Social Sciences, is an independent scholar and the editor of the journal Res Publica and of a series of books on democratization. An earlier version of this essay was presented at a September 1999 conference, “Whither China? The PRC at 50,” sponsored by the Cato Institute in Washington, D.C. It will appear along with the other conference essays in Ted Galen Carpenter and James A. Dorn, eds., China’s Future: Constructive Partner or Emerging Threat (Cato Institute, forthcoming 2000). Ý Cato Institute, 2000.

George Petersen (1921-2000)

Let us hope that today will gratify George Petersen's family for what they gave us in the man they have lost. Permit me to offer to the family to Mairi, to Eric and to Natalie not least on behalf of all who are here, and who would have wished to be here, our condolences and our solidarity in their trouble. Beside George in his battles Mairi has stood for decades friend, comrade and helpmate, wife and mentor, participant and critic, a woman of independent authority and initiative, a leader of working people and her community in her own right. To her we are indebted for her enduring support for his work in all its phases and for the production of his account of his political life, for his autobiography. George Petersen did nothing alone and if many of us here have helped from time to time, it is Mairi who was the lynchpin of his strength. His political values came out of the history of the times that bore down upon him in his formative years. He, with countless millions of others across the world, knew the First World War, the Russian Revolution, the Depression, the rise of Hitlerism, Stalinism, the Second World War, the liberation of China, the Cold War, the collapse of the old imperial certainties in Asia and Africa and the dominance of what we were once pleased to call 'American imperialism'. He was born in 1921, the year of victory for the Bolsheviks in the Civil War which followed their seizure of power in November 1917. The leaders of the Bolsheviks in that revolt, in the resistance to the foreign intervention, in the civil war that raged for four years thereafter, were Lenin and Trotsky. Petersen was born into the beginning of that era of Soviet power. He was already three when Lenin died. Trotsky was sent into exile when George was nine years old. Trotsky was assassinated at Stalin's order's when Petersen was 20. Petersen in his early adult life found inspiration in the arguments of this victim of Stalin's icepick. Countless others, entranced by 1917, upheld the Soviet formula for mankind, most of them ignorant of or unmoved by the violence of their mentors. A small minority, loyal to 1917, rejected Stalin's model Petersen among them. Petersen asserted his confidence in the fundamental relevance and persuasiveness of the revolutionary credo, if not the institutional forms, of Lenin and Trotsky till the end of his days. He openly and fearlessly associated himself with their arguments but he qualified the teaching of these Russian revolutionaries who celebrated power, the state and lawless discretion, for in no way was Petersen an authoritarian in his advocacy. He was distinguished in the history of Marxism in this country in that he was a genuine, unqualified, resolute libertarian, and a humanist in the softest sense of the word. He was a student of the history of politics. He never ceased to read, to study and to enquire, to seek fresh experience and instruction in the turbulence of society in motion. His autobiography a seminal